Late last month, the European Commission approved for publication (pre-registration) a geographical indication (GI) application for the Danish cheese HAVARTI. This raised concern amongst interested industry groups, and should cause concern amongst all export-focused businesses. Similar to trademarks, and particularly certification marks, GIs are legal protection granting producers of a particular type of product from a specific geographical region the exclusive right to use the geographical region’s name (or a regionally-known name) on their products and in related promotions. Being an exclusive right, GIs exclude producers from other regions from labeling and marketing similar or identical products under the same GI name. This means, for example, that a U.S. sparkling wine can never be sold as CHAMPAGNE in the EU, or a Kenyan tea as DARJEELING in India. If registered, the EU HAVARTI GI would exclude non-Danish cheese producers from labeling and promoting their Havarti cheeses in the EU as HAVARTI.

So what’s concerning about the potential EU HAVARTI GI registration for non-dairy businesses? Well, industry groups such as the Consortium for Common Food Names (CCFN) argue that allowing the EU HAVARTI GI application to be registered would contravene international standards by prohibiting non-Danish cheese producers from labeling and promoting their own Havarti cheeses in the EU as HAVARTI, even if they meet recognized international Havarti cheese production standards. From an intellectual property perspective, the registration would arguably expand EU GI protections to common (generic) named products. Commonly named GIs such as DIJON for mustard and CHEDDAR for cheese have traditionally been restricted from GI protection due to their common vernacular usage. HAVARTI is a widely known cheese variety this is arguably as generic as these other excluded food names. By allowing HARVARTI’s potential GI registration, the European Commission could possibly allow other generic named products to be registered as GIs, thereby hindering the promotional efforts, and ultimately success of many foreign goods in the EU.

Although the potential HAVARTI EU GI registration only directly impacts the global dairy industry and the EU market, it does underscore general issues all export-focused businesses should be aware of concerning GIs. Many businesses are unfamiliar with GIs, much less the extent to which GIs can impact their expansion and success in new foreign markets. GIs are granted legal protections in multiple countries for a wide array of goods, and can significantly impact a business’ foreign operations.

Below are some GI issues businesses should consider when entering new foreign markets:

Know the Practical Differences Between GIs and Trademarks. Before understanding what GIs restrictions a business may face in a foreign market, a business needs to recognize how GIs and trademarks differ. Unlike trademarks, GIs do not indicate or represent a individual business or their goods and services. They instead represent protections for the local conditions—natural or human-made (depending on the country)—that give products from a region their qualities and reputation. Based on these localized and natural characteristics, GIs cannot be extended, shared, or transferred to producers outside the region, and cannot be cancelled once registered. Further, in many countries that grant GIs legal protection such as the EU, member state governments, not individual producers or businesses, prosecute GI infringement claims. This means a foreign business can be assured that their unauthorized use of a registered GI in a foreign market will more likely subject them to a greater risk of legal action in that country compared to the threat of a lawsuit from a individual trademark owner.

The bottom line is that GIs prohibit exporting businesses from promoting and selling their goods in a particular country under a registered GI without much recourse.

Determine if an Export Market Recognize GIs—and to What Degree. After understanding the important differences between GIs and trademarks, businesses need to then evaluate whether the markets they wish to export to have GI protections and the extent of such protections. Nearly all countries recognize GIs for wines and alcoholic beverages through their World Trade Organization (WTO) commitments. Under Articles 22 and 23 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), WTO member states are required to extend specific GI protections for wines and alcoholic beverages, and to a reduced degree other agricultural and natural products. Most common law jurisdictions (U.S., Australia, and Japan, etc.) generally only extend GI protections to wines and alcohol beverages based on their WTO commitments. Yet, many countries, including several substantial markets, have gone beyond TRIPS’ minimum standards by providing enhanced GI protections to non-wine and alcohol agricultural products, and even non-agricultural products. The EU, China, India, and Russia, among others, extend the same level of legal protection to all agricultural and natural product GIs. Brazil, China, India, Russia, and Switzerland even extend GI protections to human made goods such as handcrafts and textiles.

Determine if There are Existing GI Registrations for Your Goods. Once a business determines whether the market(s) they wish to export their goods possess GI protections, they must evaluate whether the names of the goods they wish to use on their goods and related promotions are registered GIs. To do so, businesses must examine national GI registers in such export market(s).

Below are GI registers for some of the world’s major GI jurisdictions.

What’s the Takeaway? As the nature of GI protections are evolving in many of the world’s major markets such as the EU, businesses need to be even more aware of GIs and how they impact their operations in foreign markets. Due to the significant implications GIs have on the labeling and marketing of exported goods, businesses should work with qualified counsel to ensure that they comply with existing GI registrations to ultimately take advantage of foreign markets opportunities.

In recent months, representatives from the Trans Pacific Partnership Agreement (TPP; Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam) member states have been pushing to finalize a final TPP agreement.[1] A particularly contentious issue in these negotiations has been the intellectual property (IP) chapter of the TPP Agreement. A predominant proposed version, the U.S. Draft IP Chapter, has been controversial as it requires TPP member states to adopt IP standards that are in many cases is on par with those under U.S. law, and in some cases, beyond U.S. law and generally-accepted global IP protection standards in the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).[2] As a result, several TPP member states have objected to U.S. Draft IP Chapter, thereby stalling progress towards a final TPP agreement.

Of particular importance in these debates is the online copyright enforcement protections procedures the TPP agreement will mandate for its member states. If enacted, the U.S. IP chapter would likely require TPP member states to adopt copyright enforcement measures that would allow copyright owners, rights holders, or agents thereof (collectively, “Authorized Party”) to directly petition Internet Service Providers (ISPs) to remove hosted infringing content. Article 16.3(a) of the U.S. Draft IP Chapter requires that TPP member states provide “legal incentives for [Internet] service providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.” Although ambiguous, adopting such provisions would likely require TPP member states to maintain or enact a form of copyright protection protocols that would allow Authorized Parties to petition ISPs hosting or transmitting infringing content to remove such content.

The main question arising from these potential reforms is whether they would result in TPP member states adopting U.S.-like notice and takedown protocols, or less forceful ISP copyright enforcement measures. Notice and takedown systems generally provide ISPs a safe harbor from liability for hosting or transmitting infringing content if they remove infringing content they host or transmit upon receipt notice from an Authorized Party. In contrast, other TPP member states do not provide copyright owners such a level of protections. Some of these states do not require that a ISP take down allegedly infringing content upon receipt of notice from an Authorized Party to qualify for safe harbors. Others require that Authorized Parties seek judicial copyright enforcement to combat online infringement, which is a more delayed and costly process.

Although not stated in the U.S. Draft IP Chapter, the U.S. may, as it has in previous U.S. free trade agreements (FTAs), negotiate that TPP member states adopt notice and takedown protocols in TPP side letters.[3] In previous U.S. FTAs, the U.S. has executed additional annexed agreements, known as “side letters,” where other countries agreed to adopt U.S.-like notice and takedown protocols. This has had varying degrees of success. Australia, Peru and Singapore, among others, have adopted notice and takedown protocols similar to those under the U.S.’ Digital Millennium Copyright Act (17 U.S.C. § 512(c)(3)(A)) in FTA side letters with the U.S., while Chile rejected adopting such a system.

Similar mixed outcomes could result from the TPP as well. Brunei Darussalam, Mexico and Vietnam do not maintain any ISP copyright enforcement protocols short of judicial action. Further, a number of TPP member states including Canada, Chile and New Zealand maintain online copyright enforcement systems that arguably do not provide the same level of direct and expedient enforcement power or protections to Authorized Parties as notice and takedown systems. Lastly, some TPP member states such as Malaysia that do maintain notice and takedown protocols have called for establishing TPP agreement implementation exceptions for existing domestic legislation.[4] This would likely give TPP member states with weaker online copyright enforcement systems such as Canada, Chile and New Zealand the ability to maintain their less forceful online copyright enforcement systems, while still remaining parties to the TPP Agreement.[5]

Despite these limitations, the TPP’s potential adoption of notice and takedown protocols will ultimately impact the ability to which Authorized Parties can more quickly, cheaply and effectively enforce online copyright protections in the TPP member states. Adoption of notice and takedown protocols will enable Authorized Parties to more easily enforce online copyrights in TPP member states, while making such protocols optional would likely make such enforcement more difficult. Only time will tell whether the U.S. and other notice and takedown proponents will persuade other TPP member states to adopt notice and takedown protocols.

To understand how the TPP would impact individual TPP member state online copyright enforcement systems, the following are brief summaries of the TPP member states’ current online copyright enforcement systems. However, there are a few things to note:

Jurisdiction and National Treatment: In order for an Authorized Party to utilize a notice and takedown in a TPP member state, their content must generally qualify for national copyright protection in that TPP member state, and the particular ISP must be subject to the jurisdiction of that country. Further information about these preliminary issues can be found in my March 25, 2013 posting.

Enforcement System Legend: As mentioned, online copyright enforcement procedures vary amongst the TPP member states. Countries that maintain a notice and takedown protocols are identified below as a “Notice and Takedown,” while countries that maintain systems that simply require ISPs to notify infringers of their infringing acts without infringing content removal are listed as “Notice and Notice.” Countries that do not have means for Authorized Parties to directly enforce their copyright protections through ISP notices, and are instead forced to seek judicial action are referred to as “Judicial System.”

TPP Member State Online Copyright Enforcement Systems

United States

Enforcement System

Notice and Takedown

Overview and Notes

The U.S. notice and takedown protocols have been implemented in FTAs with Bahrain, Dominican Republic, Morocco, Oman, Peru, Singapore and South Korea.

A physical or electronic signature of a person authorized to act on behalf of the content owner alleging infringement;

Identification of the copyrighted work(s) claimed to have been infringed;

Identification of the material that is claimed to be infringing and wished to be removed or disabled, including any reasonable information that would allow an ISP to locate the material (i.e. website addresses);

A statement that the copyright owner has a good faith belief that the use of their content is not authorized by the copyright owner; and

A statement that the information provided is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the copyright owner of an exclusive right that is allegedly infringed.

The statement: “I am the owner (or agent of the owner of the copyright) in the copyright material specified in the Schedule [See number 7 below], being copyright material residing on your system or network.”

(If submitted by a copyright owner) The statement: “I believe, in good faith, that the storage of the specified copyright material on your system or network is not authorized by the copyright owner or a licensee, or the Copyright Act 1968, and is therefore an infringement of the copyright in that material.”;

(If submitted by a copyright owner’s agent) The statement: “I believe, in good faith, that the storage of the specified copyright material on your system or network is not authorized by the copyright owner or a licensee of the copyright owner, or the Copyright Act 1968, and is therefore an infringement of the copyright in that material”;

(If submitted by a copyright owner’s agent) The statement: “I have taken reasonable steps to ensure that the information and statements in this notice are accurate.”;

The copyright owner or their agent’s name, address, e-mail address, telephone number and fax number; and

An attached schedule to the notice including a description of the copyright material and the location of the infringing content.

Brunei Darussalam

Enforcement System

Judicial System

Overview and Notes

Brunei does not currently maintain any legal means for Authorized Parties to directly petition ISPs to takedown infringing content. However, recent reports have indicated that Bruneian authorities are evaluating copyright reforms, which may include ISP notice and takedown protocols.[6]

Governing Legislation

N/A

Notice Requirements

N/A

Canada

Enforcement System

Notice and Notice

Overview and Notes

Although Canada considered adopting a notice and takedown protocols in 2006, they opted for a notice and notice system in 2012 in order to balance the interests of copyright owners and Internet users.[7]

The reasoning why the copyright owner/rights holder believes that an infringement has taken place; and

The copyright owner/rights holder’s contact information.

Malaysia

Enforcement System

Notice and Takedown

Overview and Notes

Malaysia enacted copyright reforms in 2010 that permit Authorized Parties to submit infringement notices to ISPs that will remove infringing content within 48 hours of notice to the alleged infringer from the ISP. However, The International Intellectual Property Alliance (IIPA) has criticized Malaysia’s notice and takedown protocols for not providing enough details about notice requirements and enforcement procedures.[9]

As mentioned, Malaysia does not provide specific content requirements for ISP takedown notices.

Mexico

Enforcement System

Judicial System

Overview and Notes

Mexico has no legal procedures for Authorized Parties to remove infringing online content short of seeking judicial action. It is also important to note that Mexican telecommunications laws prohibit ISPs from disclosing their customers’ personal information.[10]

Governing Legislation

N/A

Notice Requirements

N/A

New Zealand

Enforcement System

Notice and Takedown-Judicial System Mix (aka Three Strikes)

Overview

After enacting notice and takedown protocols in 2008, New Zealand repealed them in February 2010. They were replaced with a Three Strikes System, requiring Authorized Parties to submit multiple notices to an ISP, and a takedown application to the New Zealand Copyright Tribunal in order to obtain the removal of infringing content. The Three Strike System subjects the Authorized Party to fees of NW$25.00 (US$20.00) per notice, and NZ$200.00 (US$208.00) per application.[11]

(If a rights owner is acting as an agent for the copyright owner) Evidence of the rights owner’s authority to act as agent for the copyright owner;

Identify the IP address at which the infringements are alleged to have occurred;

The date on which the infringements are alleged to have occurred at that IP address;

For each copyright work in which copyright is alleged to have been infringed: (i) the name of the copyright owner in the work; (ii) the name of the work, along with any unique identifiers by which it can be identified; (iii) the type of work it is (in terms of section 14(1) of the Act); (iv) the restricted act or acts (in terms of section 16(1) of the Act) by which copyright in the work is alleged to have been infringed; (v) the New Zealand date and time when the alleged infringement occurred or commenced, which must specify the hour, minute, and second; and (vi) the file sharing application or network used in the alleged infringement; and

A statement that, to the best of the rights owner/copyright owner’s knowledge, the information provided in the notice is true and correct; and that statement must be verified by a signature (physical or digital) of the rights owner/copyright owner or a person authorized to sign on behalf of the rights owner/copyright owner.

Information reasonably sufficient to enable the ISP to identify the copyrighted work(s) appeared to have been infringed;

The identity, address, telephone number and electronic mail address of the complaining party (or its authorized agent);

Statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by copyright owner, its owner, its agent or the law;

Statement with sufficient indicia of reliability (such as a statement under penalty of perjury or equivalent legal sanctions) that the complaining party is the owner of an exclusive right that is allegedly infringed or is authorized to act on the owner’s behalf; and

Name and address of the complainant (if acting on the copyright owner’s behalf);

Complainant address for service in Singapore (if a non-Singapore resident);

Complainant’s telephone number, fax number and e-mail address;

Identification of copyright material and location of allegedly infringing content;

A statement that the information in the notice is accurate;

A statement that the complainant is the owner or exclusive licensee of the copyright in the material referred to in complaint or is authorized to act on behalf of the owner or exclusive licensee of the copyright in the material referred to in the notice;

A statement that the complainant requires the network service provider to remove or disable access to the allegedly infringing content;

A statement that the complainant or their agent, in good faith, believes that the electronic copy referred to in the notice is an infringing copy of the protected material content;

A statement that the complainant is the owner, exclusive licensee, or agent thereof of the copyrighted content; and

A statement that the complainant submits to the jurisdiction of the courts in Singapore for the purposes of any proceedings relating to any offense under section 193DD(1) of the Copyright Act or any liability under section 193DD(1)(b) of the Copyright Act.

**Important Note**: Even if a country maintains notice and takedown protocols, an ISP is generally not obligated to take down infringing content despite legal incentives to do so. Those with further questions about a TPP member state’s online copyright enforcement procedures should seek qualified counsel in that particular country.

Earlier this summer, several news outlets reported that U.S. fast food conglomerate Yum! Brands, the operator of Kentucky Fried Chicken (KFC), was considering taking legal action against a fast food restaurant in Bangkok, Thailand shockingly called “Hitler.” The Hitler restaurant was selling fast food under a logo similar to KFC’s iconic logo, replacing the face of Colonel Harland Sanders, KFC’s founder with his signature white suit and string tie, with the face of Adolph Hitler, former German Chancellor, warmonger and mass-murderer.

Despite the Hitler restaurant’s subsequent removal of their offensive interpretation of the KFC logo, the incident highlighted legal issues businesses may face in foreign markets beyond the unauthorized use of their marks (aka infringement). I’m talking about foreign trademark tarnishment. Trademark tarnishment is the unauthorized use of a well-known mark that degrades consumers’ positive associations with such mark, thereby harming the mark’s overall reputation.[1]

What does this mean in an international context? Foreign trademark tarnishment can result in reduced foreign demand for a business’ goods or services, and hinder their ability to take advantage of foreign market opportunities. Although protecting against trademark tarnishment is generally difficult, KFC’s recent altercation with the Hitler restaurant shows ways in which foreign businesses can take advantage of foreign national trademark laws to protect their marks against tarnishment—even if such countries do not main specific protections against tarnishment.

Thai trademark law does not providing express protections against tarnishment. However, KFC’s logo likely qualifies for tarnishment-like protections in Thailand because it would qualify as a “well-known mark.” Unlike the U.S. and other common law countries (Australia, Canada, India, South Africa and the United Kingdom, among others), Thailand is a “first to file” country, meaning that a mark can normally only obtain full protection under Thai law through registration with the Thai Department of Intellectual Property (DIP). However, Section 8(10) of the Thai Trademark Act (“Act”) acknowledges rights for unregistered well-known marks. Since 2005, an unregistered mark can be designated as a well-known mark under Thai trademark law if it meets several evidentiary criteria upon petition to the DIP’s Board of Well-Known Marks.[2]

In the case of KFC, it is likely that their logo qualifies as a well-known mark in Thailand based on KFC’s global and national recognition. KFC has more than 450 outlets in Thailand and approximately 15,000 outlets worldwide—not to mention extensive global advertising and promotional campaigns.[6] These facts likely qualify the KFC logo for well-known mark protection in Thailand (upon petition), giving KFC broad protection under the Act for its logo among multiple if not all classes of goods and services.

By obtaining trademark protection, a trademark owner can normally prevent others from most forms of unauthorized use of such mark. Yet, you might asking yourself, o.k., while supplanting Adolf Hitler for Colonel Sanders is detestable, isn’t it permitted as free speech? The answer varies from country-to-country and from case-to-case. Several major markets including the U.S., the European Union and India, recognize that unauthorized users of a mark may defend against infringement or tarnishment claims through fair use, namely the ability to use a registered mark for legitimate free speech purposes such as parody. In the U.S., such a defense is upheld sometimes in a confusing way. For example, a U.S. Court found that the unauthorized noncommercial use of marks from a L.L. Bean catalogue can be parodied in an adult magazine, but the unauthorized use of the Dallas Cowboys football cheerleading team’s trademark in a pornographic film did not.[7] In terms of Nazis and terrorists, a U.S. Court did allow an unauthorized user to conjure up Nazi and Al-Qaeda themes in their use of Wal-Mart’s well-known mark when such use was non-commercial.[8]

Fortunately for KFC, Thailand does not appear to afford such a fair use defense. Section 109 of the Act prohibits any person who “imitates” a registered mark to mislead the public as to its true ownership, subjecting such user to fines up to 200,000 Baht (approx. US$ 6,250.00) and/or two years imprisonment. Due to the inherent broadness of “imitates” without any express fair use defenses provided under the Act, Thailand appears to possess little to no trademark fair use exceptions for parody or other recognized fair uses. Based on these facts, KFC would likely be able to seek enforcement of their trademark rights in their logo as a well-known mark against the Hitler restaurant.

What’s the takeaway? The moral of this story is that understanding foreign national IP laws can help businesses to find effective solutions to protect against tarnishment and other unauthorized uses abroad, even if such protections are not expressly provided in foreign national legislation. Although few business maintain as well-known marks as KFC’s logo, most businesses can adopt tailored foreign trademark protection strategies to prevent tarnishment or infringement of their marks. Businesses who have tarnishment issues in a particular market should consult with qualified local counsel to understand what protections can be afforded to their marks.

You may have thought that this summer was all about capturing that certain bohemian-chic essence, but the true trendsetters are all talking about recent developments in Indian patent law. In April, the Indian Supreme Court ruled in Novartis AG v. Union of India & Othersthat Swiss pharmaceutical maker Novartis was not entitled to patent protections for their leukemia treatment drug Gleevec. The Indian Supreme Court’s rationale was heavily based on their efforts to stop pharmaceutical “evergreening” – a practice pharmaceutical companies use to extend the life of a patent by seeking patent protection of subsequent improvements to their drugs or alternative, novel uses for such drugs.

Novartis had been attempting to patent a new and improved version of Gleevec. It had been unable to patent the original version of the drug in India because India did not recognize or grant pharmaceutical patents prior to completing their implementation of their World Trade Organization obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 2005. Upon discovering an improved version of Gleevec, Novartis sought to gain patent protection in an effort to halt the rampant manufacturing of generic forms of the drug in India. However, the Indian Supreme Court found that Novartis had not created enough of an improvement in the new Gleevec to qualify the drug as a new invention. Since Novartis’ ruling, Indian courts have subsequently invalidated other similar patent applications as seen last Friday with the invalidation of the Glaxo Smith Kline’s cancer drug Tykerb.

Well, “fear not!” Keep in mind that Novartis and the other related Indian court decisions only apply to pharmaceutical patents as such rulings have been based on a specific provision in the Indian Patent Act relating to incremental innovations in pharmaceuticals. So, given the limited applicability of Novartis and related cases, foreign businesses should simply forge ahead with their Indian business relationships, right?

Not quite so fast. Dealing with any foreign business, inventor, or entity comes with its own challenges and those looking to partner with Indian resident businesses should consider the following before getting too involved.

1. Get a Comprehensive Agreement in Place Beforehand. Many partnering businesses have a difficult time putting a written agreement together prior to beginning their business relationship. THIS. IS. A. MISTAKE. Getting a clear agreement in place beforehand is important for foreign businesses and their Indian counterparts to prevent future misunderstandings that could potentially derail their objectives and result in substantial costs. Such an agreement should not only clearly outline the parties’ rights and obligations with respect to the Intellectual Property (IP) created in their relationship, it should additionally cover business aspects of the relationship. Although a large part of such relationships is based on the IP, the business side encompasses what happens once IP is created and it is equally important.

Specifically, agreements should address the following:

What is being protected? The agreement should clarify for foreign businesses and their Indian counterparts the types of IP their relationship needs to protect. This can be as simple as designating that both patentable and trade secret innovations will be protected and as complicated as describing protections for each and every potential innovation arising out of the relationship, whether a part of the parties’ original intentions or not. This designation process will not only help to define the scope of the parties’ project, it will also help ensure that the parties seek appropriate protections and enforcement measure for their IP. Completing this exercise is especially important in a cross-border context as the enforcement of IP rights abroad may be more difficult than simply making sure everyone is on the same page from the beginning. India in particular has been notorious for lacking the necessary infrastructure to enforce IP rights efficiently.

Who gets ownership? Establishing ownership of resulting IP from an Indian business relationship is important in an initial agreement because countries vary in the rights they give to owners and inventors. For example, Section 2(p) of the Indian Patent Act uses the term “patentee” for patent owners that is defined as “the person for the time being entered on the register as the grantee or proprietor of the patent.” In contrast, the U.S. does not officially use the term “patentee” and most American inventors would probably assume that patentee refers specifically to inventors. As illustrated above however, “patentee” in India is not necessarily limited to inventors. Therefore, making sure that all parties are clear on who will be named inventors and who will own resulting IP is essential to ensuring a good business relationship with an Indian resident business or inventor.

Who gets paid? This, inevitably, is a difficult topic to discuss, and it is inextricably tied to IP ownership rights. When there is no money coming in, everyone wants to split things down the middle. However, once there is money or it looks like there will be no money, businesses start to quibble. In order to avoid costly, drawn out battles that could prevent businesses from furthering an otherwise fruitful relationship, it is important to outline how all parties are to be compensated for their hard work, time and ingenuity once their relationship has taken off as well as when it has reached its conclusion.

Outlining business plans in writing through an agreement not only forces the parties to talk about their innovation strategy, marketing plans, and production plans; it also enables them to have a clearer direction for their relationship. If anyone is worried that creating a detailed, written plan will inhibit their creativity, then remember that a good agreement should leave some room for flexibility. Allowing such flexibility can lead to great innovation and profitability. Ultimately, however, having a clear outline of where the parties’ want to go, how they want to get there, and what they need to get to that point (the “what” usually being the IP) can lead to a more profitable and innovative business relationship and can prevent costly future litigation.

2. Be Conscious of Indian Patent Filing Requirements and Tolling Restrictions. Understanding Indian patent application filing requirements and the interplay between them and other foreign patent filing requirements is essential for businesses to ensure the broadest global patent protections for their resulting innovations. The most important thing for non-Indian businesses to realize is that Section 39 of the Indian Patent Act requires that patent applications for any invention created with the help of Indian residents must first be filed in India. Yes, before filing an international application under the Patent Cooperation Treaty, before filing a U.S. patent application with the United States Patent and Trademark Office (USPTO), and before filing a patent application anywhere else, foreign businesses working with Indian inventors must file a patent application with India’s patent office (The Controller General of Patents, Designs, and Trademarks (Controller)).

Does that sound unreasonable? Foreign businesses may be able to apply for special permission from the Controller to initially file abroad, but don’t bet on the Controller bending the rules. If no special permission is given, a foreign business must wait for approximately six weeks after filing in India to file elsewhere.

So, if a foreign business has applied with the Controller and waited six weeks, they can now submit applications anywhere else…right? Sure! Just make sure not to dilly-dally because filing in India limits the amount of time a business has to file their patent application with the USPTO and other national patent offices. Knowing the timelines from start to finish of the Indian patent application system and how filing dates in India affect the requirements for filing applications in other countries can greatly impact business decisions.

Parting Thoughts. Go forth and innovate with Indian resident compatriots! The considerations above and recent Indian pharmaceutical patent decisions should not stop foreign businesses from doing so. Collaboration enables people to create great innovations, but every business relationship, whether down the hallway or across the world, has its own challenges and limitations. It’s good for businesses to be honest about those challenges and to create a plan for overcoming them before they run into them. These general suggestions don’t apply to everyone and it’s always wise to consult with qualified local counsel and persons who can advise on the particulars of a specific business. In the end, it will save businesses a lot of time, headaches, and money to simply invest in the relationship by setting it up correctly.

Also, no matter how overwhelming the planning process may seem, just remember, at least you’re not going up against Bollywood screenwriters who generously “borrow” from American film. In cases like those, it’s best to pop some popcorn, settle onto the couch, and enjoy the results – because the results ARE rather glorious, are they not?

Trade secrets are arguably the most common form of intellectual property transmitted across borders in today’s global market. Any business that seeks to capitalize on foreign market opportunities—either by working with a foreign partner or establishing their own foreign operations—is likely to transmit confidential information abroad. However, such cross-border transmissions directly impact the legal protections afforded to such information as the extent of trade secret protection and enforceability of trade secret rights varies between countries. Examining some of the main differences in trade secret protection and enforceability between countries is important as businesses increasingly must choose how to contractually structure protections for their confidential information abroad. Further, understanding the extent of trade secret protections afforded to confidential information in different markets can help businesses establish effective country-specific trade secret protection strategies that address the strengths and weaknesses of a particular country’s legal protections for trade secrets.Particular factors that should be considered include:

Qualifying confidential information

Injunctive enforceability of trade secret rights

Foreign judicial system effectiveness

Qualifying Confidential Information. A preliminary factor for businesses to consider is the extent to which their confidential information is protected under a country’s trade secret laws. Most countries have adopted a minimum level of legal protections for trade secrets, yet such protections often vary. World Trade Organization (WTO) member states are required to adopt minimum legal protections for trade secrets. Under Article 3 and Article 39(2) of The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), WTO member states must provide persons or entities of their countries and other WTO member states legal rights to prevent the disclosure of lawfully-held information that:

Is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

Has commercial value because it is secret; and

Has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

As this widely accepted minimum legal requirement is ambiguous, WTO member states have the ability to establish their own variation, often differing the amount and type of confidential information qualifying for trade secret protection. For example, the U.S.[1] and China[2] provide legal protection for confidential information that has actual (current) or potential commercial value, where TRIPS is silent about the time to which such value must be established.[3] This means that a business that has developed or acquired confidential information that will be commercially valuable at a future date will qualify for legal protection for such information in these countries, subject to protection and secretive requirements.

In contrast, several countries are silent on this commercial value issue and maintain other factors for determining trade secret protection. For example, in India, trade secrets have been judicially defined as “formulae, technical know-how or a peculiar mode or method of business adopted by an employer which is unknown to others.”[4] Not only is this definition silent on when commercial value must be established, it is also silent on what constitutes sufficiently reasonable protection procedures for such information to qualify for trade secret protection.

As these examples illustrate, countries often maintain different qualifying standards for trade secret protection despite satisfying their TRIPS obligations. Based on these differences, businesses must carefully determine what portions of their confidential information qualifies for trade secret protection in a particular country.

Injunctive Enforceability of Trade Secret Rights. Trade secret owners must also consider their ability to protect their trade secrets through injunctive relief in a particular country. Most countries will grant a permanent injunction against a person or entity after they are found by a Court to have misappropriated a trade secret. However, this often requires initiating and succeeding in a legal action, which is not certain to succeed and may take a substantial amount time before being granted. This could harm the commercial value of the confidential information, and in many cases, the potential success of the trade secret owner’s foreign business operations or strategies. As a result, seeking a preliminary injunction, namely an injunction sought at the onset of a trade secret misappropriation proceeding, is essential to effective trade secret protection.

A business’ ability to seek a preliminary injunction to protect their trade secret varies from country-to-country. In the U.S., a trade secret owner may seek a preliminary injunction against a misappropriating party or parties providing them assistance through an initial motion in a misappropriation proceeding.[5] Although U.S. jurisdictions generally maintain high evidentiary burdens for trade secret owners to obtain preliminary injunctions[6], U.S. courts allow evidentiary exchanges between the parties (known as discovery) and copies of original evidence to be admissible under specific requirements. U.S. courts may also permit discovery proceedings to be expedited based on the sensitivity of the confidential information at issue.[7]

In contrast, other countries make obtaining a preliminary injunction more difficult. For example, preliminary injunctions are rarely granted in Chinese trade secret cases due to the absence of a discovery process and restrictive evidentiary burdens. Chinese trade secret proceedings do not have discovery processes and Chinese Courts will generally only accept original written forms of evidence.[8] This means that trade secret owners in China are forced to gather their own evidence, and can only admit original written evidence, which makes satisfying the evidentiary burden to obtain an preliminary injunction substantially more difficult.

As illustrated with China’s trade secret injunction procedures, trade secret owners need to determine what challenges they will face in enforcing their trade secret protections under a country’s judicial procedures, regardless of the extent of a country’s trade secret protections.

Foreign Judicial System Effectiveness. Even if a country’s injunctive judicial procedures are surmountable, a country must also have an effective judicial system to even allow injunctive enforcement to be brought forward. This requires determining whether a country has an effective judicial system to enforce trade secret protections. There are several resources for businesses to determine the effectiveness of a foreign country’s judicial system, including their national IP offices and trade agencies. In the U.S., the Office of the U.S. Trade Representative (USTR) publishes annual reports (known as Special 301 Reports) that identify IP enforcement concerns for U.S. IP owners by country, including ineffective judicial systems. For example, in the 2013 USTR Special 301 Report, the USTR identified Argentina, Bulgaria, Greece, Guatemala, India, Indonesia, Paraguay, Peru and Turkey as having judicial system inefficiencies for enforcing IP rights.

Parting Notes. Although the above-mentioned factors are important when evaluating cross-border trade secret protections, examining such factors only comprise a portion of an effective foreign trade secret protection strategy. Establishing the best protections for trade secrets abroad should also include other protection measures including the development of internal business protocols to prevent unauthorized information disclosures, among other procedures. Working with qualified counsel can effectively assist with evaluating both the above-mentioned factors and internal business protocols.

The Obama Administration released a report late last month entitled Administration Strategy on Mitigating the Theft of U.S. Trade Secrets detailing strategies the U.S. will take to combat trade secret theft, including the pursuit of enhanced foreign legal protections for U.S. trade secrets through ongoing and future trade agreements. Particularly, the Administration will seek to establish new trade secret protections in treaty member states, similar to those provided under U.S. law, in trade agreement negotiations such as Trans Pacific Partnership (TPP; Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, U.S., Vietnam, and potentially the Philippines).

Establishing harmonized trade secret protections in trade agreements—such as the TPP—will likely provide U.S. and treaty member state businesses trade secret protections in treaty countries beyond those currently provided under international IP law. The main standard for international trade secret law, Article 39.2 of the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), provides that signatory states must establish means for persons and entities to protect information that is: (a) secret; (b) commercially valuable due to its secretive status; and (c) has been kept secret through reasonable measures. However, Article 39.2 has received criticism for not providing specific requirements about what legal protections WTO member states should adopt for compliance, thereby resulting in disparate and often uneven trade secret protections from country-to-country.

The adoption of U.S.-like trade secret protections in foreign countries such as the TPP member states can help to better ensure that both U.S. and treaty member state businesses have necessary trade secret protections, both at home and abroad. Despite the Obama Administration’s call for such harmonization, it remains to be seen whether U.S.-like trade secret protections will be adopted in ongoing and future trade agreement negotiations.

U.S. President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso announced last Tuesday that the U.S. and the European Union (E.U.) would be entering into free trade agreement (FTA) negotiations following nearly two years of consultative talks and evaluation. Identified as the Transatlantic Trade and Investment Partnership (TTIP), the potential FTA will a have a substantial impact on the world economy as it would liberalize nearly a third of the world’s trade. It may also have substantial intellectual property (IP) implications for IP owners if the U.S. and E.U. can overcome ongoing disagreements over international IP protection reforms.

Initially, there were low expectations that any substantial international IP reforms would result from the agreement. The U.S. and the E.U.’s High-Level Working Group on the TTIP stated in their final report last year (available here) that both parties should “address a limited number of significant IPR issues of interest to either side, without prejudice to the outcome” in their FTA negotiations. Further, news outlets reported that there were no plans for the U.S. and E.U. to harmonize their IP systems.

However, just before the February 12th TTIP announcement, U.S. congressional representatives sent a letter to U.S. Trade Representative Ron Kirk identifying priorities the U.S. Congress wants the TTIP to address, including strong IP rights protection for U.S. industries. Sent by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Senate Member Orrin Hatch (R-Utah), the letter identified certain E.U. policies towards foreign IP as being substantial barriers to trade that should be improved. Particularly, the letter demanded that the TTIP establish measures to address EU policies that undermine the value of foreign IP protection—including pricing, reimbursement and regulatory transparency. Additionally, the senators identified geographical indications, trademark-like protections given to certain goods from specific regions such as CHAMPAGNE for sparkling wine and ROQUEFORT for cheese, as impeding the ability for U.S. agricultural businesses to compete in the E.U. market.

Lastly, the letter demanded that the TTIP should not undermine the U.S.’ ability to achieve high levels of IP protection in other U.S. FTA negotiations. In enacted and proposed FTAs such as the U.S.-Australia FTA and the Trans Pacific Partnership respectively, the U.S. established IP protections beyond minimum international standards established under World Trade Organization’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)—known as TRIPS Plus standards, pertaining to a wide range of IP rights and enforcement.

Despite U.S. calls to address international IP reforms, it is unclear to what degree the U.S. and E.U. can find common ground to enhance international IP protections in their respective countries/blocs. This does not even mention the ability for the U.S. to establish TRIPS Plus IP standards with the E.U. as in other U.S. FTAs. Positive signs towards the potential of meaningful international IP protection reforms between the U.S. and E.U. can be seen in recent cooperative efforts including joint U.S.-E.U. online IP enforcement initiatives, and the establishment of the Cooperative Patent Classification system for harmonized patent document classifications that will be operational this year. Further, the German government, the E.U.’s largest economy, has called for the TTIP to be a fully comprehensive agreement. However, the E.U. Parliament’s rejection of the U.S.-backed Anti-Counterfeiting Trade Agreement last July showed that the E.U. is potentially wary of considering enhanced international IP protections that would likely result from a comprehensive FTA with the U.S. Time will tell whether the U.S. and E.U. can established enhanced international IP protections.

What are your thoughts on TTIP and its potential for international IP reforms? How will it impact you or your business?

The ongoing trade dispute between the U.S. and the Caribbean island nation of Antigua and Barbuda has produced unexpected and potentially harmful consequences for U.S. copyright owners. Antigua announced last week its plans to establish a website selling media and software protected under U.S. copyright law—and will do so without obtaining permission of its copyright owners or paying any form of royalties.

Surprisingly, Antigua has the right to establish this pirating website under international law. It won a 2007 World Trade Organization (WTO) dispute settlement against the U.S. (Dispute Settlement 25 – DS 25), where the U.S.’ blocking of Antiguan online gambling sites from U.S. customers was found to be a violation of the U.S.’ General Agreement on Tariffs and Trade (GATT) commitments. Consequently, Antigua was granted the right to suspend its WTO obligations to the U.S. under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). This has allowed Antigua to legally sell pirated U.S. copyright content in amounts not exceeding $21 million annually until the U.S. removes its blockade of Antiguan gambling websites or pays compensation. As of yet, the U.S. has done neither.

To Antigua’s credit, it has yet to enforce its entitled remedies in the six years since DS 25’s ruling. According to reports, Antigua’s main goal is not to become a copyright pirate—it simply wants the U.S. to comply with DS 25. Yet, the U.S.’ continued failure to do so has made Antigua feel that it has no other choice but to open the pirating website to pressure the U.S. into compliance.

Ultimately, U.S. copyright owners will pay the price for the U.S. government’s failure to comply with DS 25. Reports are that the U.S. government will compensate U.S. copyright owners for lost royalties who are infringed from Antigua’s pirate website. However, international copyright law gives U.S. copyright owners legal protections beyond mere royalties. Qualifying U.S. copyright owners have the right under both U.S. copyright law (17 U.S.C. § 602(a)(2)) and Antiguan copyright law (2003 Copyright Act) to restrict movements of their works across borders for commercial use, namely to prevent the unauthorized trade in protected works known as parallel importation or grey goods. As controlling the availability and flow of protected content is crucial to capitalizing on foreign markets opportunities, U.S. copyright owners whose works are infringed through the Antiguan pirate website will be harmed by their inability to control the flow or distribution of their works, with no apparent recourse or compensation under international, U.S., or Antiguan law.

As any business who has foreign IP protection concerns know, protecting IP rights abroad is hard enough even with protections under international law. The developments in the U.S.-Antiguan trade dispute are harmful beyond mere infringement as they act to undermine what minimum protections U.S. copyrighted works enjoy abroad under international law, and according to commentators, they help to establish a negative precedent that could lead to similar outcomes in larger trade disputes with potentially more severe damages for U.S. copyright owners. Time will tell whether this will come true.

What do you think of the U.S.-Antiguan trade dispute? Will you be affected by it and how?